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June 25th, 2011 at 11:42 am
gbase-
Please going forward stick with parameters for the alerts that we issue, you would realize as you follow us that 10 points makes a world of a difference when you have to roll. If you miss a trade, it is better to stay out for the month rather than force the trade. For the purposes of what you have just created, when your delta get to .20 on the call side buy insurance at the 835 strike price and the rule of thumb is one contract for every 10 you hold in the spread. Also monitor the RUT and strategically buy insurance at the 835 strike price if there is a downward movement in the RUT, make sure that you pay less than $1 for it.
So the first step is to buy the insurance the next step if your delta’s continue to explode is to roll up on the CALL side to the next 8 delta and increase the contract side by 1.5x. Also read the latest article on "Adjusting the Trade – Moving out of Harms Way"
Hope this helps.